annual financial report - texas state university

ANNUAL FINANCIAL REPORTfor the fiscal year ended August 31, 2020

for

TEXAS STATE UNIVERSITY

B Texas State University

TEXAS STATE UNIVERSITY HAS BEEN RANKED AMONG THE TOP 14 U.S. INSTITUTIONS FOR SOCIAL IMPACT.Times Higher Education University Impact Rankings

Texas State University 1

Annual Financial Report for the fiscal year ended August 31, 2020

ABOUT TEXAS STATE UNIVERSITY

Though our name has changed through the years, our commitment to Texas and exceptional education has not. Since 1899, we here at Texas State University, the flagship institution of the Texas State University system, have been dedicated to making a positive impact in our world. A doctorate-granting, Emerging Research Institution, we are home to nearly 38,000 undergraduate and graduate students changing the state, the nation, and the world. With 99 bachelor’s, 93 master’s, and 14 doctoral programs, our students have the option to study what they are passionate about. Texas State is also the largest employer in the Greater San Marcos region, employing nearly 4,000 full-time faculty and staff members.

2 Texas State University

WE ARE IN TEXAS, FOR TEXAS, AND BEYOND TEXAS

88%

96%

80%

NEARLY 38,000

OVER $2.2 BILLION

29,000 JOBS

of our 200,000+ alumni live in Texas.

of our students are from Texas.

are working or continuing their education in Texas one year after graduation.

students from 224 of the 254 counties in Texas.

economic impact of Texas State on the State of Texas. (THE ECONOMIC IMPACT OF TEXAS STATE UNIVERSITY, 2014)

employment impact across the state (THE ECONOMIC IMPACT OF TEXAS STATE UNIVERSITY, 2014)


Dr. Denise M. Trauth


I am pleased to present our 2020 Annual Financial Report which demonstrates the continued financial strength of Texas State University. The university’s achievements this year reflect an institution with over 200 academic programs, world-class research, and a culture of excellence rich in diversity. Our distinguished and dedicated faculty and staff make Texas State one of the top public universities in Texas, and our more than 37,800 primarily traditional students make us one of the largest universities in the nation.

Our faculty take the responsibility of nurturing students and cultivating character seriously. We value inclusion, ethical behavior, honesty, integrity, diligence, courage, compassion, fairness, civility, and respect. Our extensive list of distinguished alumni includes captains of industry, generals of the armed forces, creative geniuses, ambassadors, legislators, and the only President of the United States to graduate from a university in Texas. These alumni stand as testimony to the university’s proud legacy and the list of over 200,000 Texas State alumni continues to grow with each passing year.

In fact, only the global coronavirus pandemic could stop our streak of seven consecutive years of record freshman enrollment. Despite the pandemic, we also produced the largest number of graduates in our history, with over 8,900 students completing their degrees. Those graduates go into the world with the added good fortune of having been a part of a university with a rising national profile. Our excellence in research is reflected not only in the quality and growth of our master’s and doctoral

programs, but also in our total research expenditures, which grew from under $10 million in 2005 to more than $70 million this past year.

It is not a coincidence that our research activities have increased substantially, that philanthropic giving continues to be substantive, that freshmen enrollment continues to be strong, that we are adding degree programs in high-demand disciplines, and that Texas State continues to be recognized for our accomplishments. Rather, we are reaping what we have sown through a very deliberate planning process and a lot of hard work from every corner of the university. I am proud of our world-class academic community, and I invite you to study this document and learn more about Texas State University, the Rising Star of Texas.

Sincerely,

Denise M. Trauth

President

MESSAGE FROM THE PRESIDENT


Mr. Eric Algoe

Financial Strength Amidst a time of global turmoil, Texas State University continues to flourish on many fronts. Even a cursory review of this Annual Financial Report demonstrates as much: the university’s Net Position grew again this year, increasing by more than $62 million and ending just shy of $1.6 billion; the university’s current unrestricted cash and equivalents went up nearly $100 million thanks in large part to curtailed spending once COVID-19 forced much of our instruction online; and the university’s combined endowments stand at more than $225 million. Financially sound as we are, however, we understand that the true measure of a university’s strength comes from the stature of our academic programs, the measure of the knowledge we create and impart, and from our people. Texas State is strong on all those fronts.

Growth in Graduates, Research, Inclusiveness and Quality Students want to be at Texas State. This is evidenced by the impressive trend of student enrollment growth over the past several decades and our record-setting graduating class of 2020 of 8,923 students. With more than 37,800 students enrolled this fall semester, we rank among the largest universities in the country. We are especially proud of the fact that Texas State’s student body demographics mirror those of the state of Texas itself in terms of diversity across every conceivable measure. With an incredibly wide variety of backgrounds, our students find a welcoming home here from across the state of Texas, every state in the country, and dozens of countries around the world. Texas State University is a minority-majority institution and, as such, is well positioned to prepare our students for the future of Texas and the nation. While the size and quality of our student body is impressive, measures of our academic strength also continue to improve with strong retention

and graduation rates, our admission this year into the elite Association of Research Libraries, and our continuing ability to attract some of the best and brightest students in the country to be Bobcats each year.

Yesterday, Today, and Tomorrow From the groundbreaking of the first building at Texas State in 1899, our beloved Old Main in San Marcos, to our first building in Round Rock, Avery Hall, to the cutting-edge laboratories, collaboration spaces, and innovation zones that we are designing and building today, our facilities make a statement about who we are as a university and who we intend to be in the future. We continue to invest heavily in our classroom and research facilities. Our Science, Technology, and Advanced Research (STAR) Park is a center for fostering and commercializing innovation and continues to grow.

The COVID-19 pandemic will undoubtedly have ramifications for higher education just as it will for many other areas of the global economy for many years to come. Texas State University will continue to find innovative ways to serve our students and boldly fulfill our mission in that uncharted future. We continue to be financially sound, growing in stature and quality, and continue to move toward National Research University recognition through careful planning and management.

VICE PRESIDENT FOR FINANCE AND SUPPORT SERVICES



TABLE OF CONTENTS

Organizational Data 7

Independent Certified Public Accountant’s Review Report 18

Management’s Discussion and Analysis 21

Financial Statements

Statement of Net Position 26

Statement of Revenues, Expenses, and Changes in Net Position 28

Matrix of Operating Expenses Reported by Function 30

Statement of Cash Flows 34

Statement of Fiduciary Net position, and Changes in Net Position 36

Notes to the Financial Statements

Note 1: Summary of Significant Accounting Policies 38

Note 2: Capital Assets 44

Note 3: Deposits, Investments and Repurchase Agreements 48

Note 4: Long-Term Liabilities 51

Note 5: Bonded Indebtedness 52

Note 6: Leases 53

Note 7: Pension Plans and Fringe Benefits Paid by the State 53

Note 8: Interfund Activity and Transactions 53

Note 9: Contingencies and Commitments 55

Note 10: Risk Management 55

Note 11: The Financial Reporting Entity 56

Note 12: Stewardship, Compliance, and Accountability 58

Note 13: Donor Restricted Endowments 58

Note 14: Termination Benefits 59

Note 15: Restatement of Net position 59



THE TEXAS STATE UNIVERSITY SYSTEM BOARD OF REGENTS

Name Member’s City (Texas) Term ExpiresWilliam F. Scott, Chairman Nederland 2025David Montagne, Vice Chairman Beaumont 2021Charlie Amato San Antonio 2025Duke Austin Houston 2023Garry Crain The Hills 2023Dr. Veronica Muzquiz Edwards San Antonio 2021Don Flores El Paso 2025Nicki Harle Baird 2023Alan L. Tinsley Madisonville 2021Amanda Lee, Student Regent Huntsville 2021

THE TEXAS STATE UNIVERSITY SYSTEM - SENIOR ADMINISTRATIVE OFFICIALS

Brian McCall, Ph.D. ChancellorMr. Daniel Harper Vice Chancellor for Finance

UNIVERSITY ADMINISTRATION - KEY OFFICERS

Dr. Denise M. Trauth PresidentDr. Eugene J. Bourgeois Provost and Vice President for Academic AffairsMr. Eric Algoe Vice President for Finance and Support ServicesDr. Barbara Breier Vice President for University AdvancementMr. Ken Pierce Vice President for Information TechnologyDr. Mary Ellen Cavitt Interim Vice President for Student AffairsDr. Larry Teis Director, Department of AthleticsDr. Lisa Lloyd Vice President for University AdministrationDr. William T. Chittenden Presidential FellowMr. Darryl J. Borgonah Associate Vice President for Financial Services


OUR STUDENTS ARE MORE THAN JUST NUMBERSOur students are more than just students. They are the future of this great state. What they accomplish here will echo across Texas for decades. That’s why we believe in providing every single student access to an outstanding college education.

37% of undergraduates received a Pell grant in 2018, the third highest among Texas public universities.

39% of our students are Hispanic. Texas State became a Hispanic-Serving Institution in 2011.

46% of TXST undergraduates are first-generation students.

55% of our students identify as minorities, reflecting the diversity of Texas.

60% of Texas State students work while enrolled.



OF SENIORS WOULD ATTEND TXST AGAIN IF THEY COULD START OVER.2019 National Survey of Student Engagement

84%



IN FISCAL YEAR 2020

73% of students were awarded

financial aid.

$371,126,650 in financial aid was awarded.

$1,763,682 in work-study funding.

$28,167,497 in total scholarships awarded.

$122,502,506 in total grants awarded.

REMOVING FINANCIAL OBSTACLES TO EDUCATION

Financial aid is critical to the success of students. Scholarships, grants, work-study funding, and all other means of financial support help to ensure that students not only can afford higher education, regardless of economic background, but can also focus on completing their degree.



10,248

5,600

$15.9MILLION

BOBCAT PROMISE RECIPIENTS SINCE 2009.

ESTIMATED FRESHMAN ADMITS QUALIFIED IN 2020 FOR BOBCAT PROMISE.

IN EMERGENCY FINANCIAL AID GRANTS WERE AWARDED TO 17,672 STUDENTS THROUGH BOBCAT CARES.


BOBCAT CARES AND BOBCAT PROMISE

The COVID-19 pandemic, which has upturned the life of many Texas families, has created an even greater financial need among our students. As a result, Texas State created the Bobcat CARES program to assist eligible students, including a new scholarship to cover fee and tuition costs for the fall 2020 semester. Additionally, we expanded our tuition-free Bobcat Promise program to include Texas students with a family adjusted gross income that does not exceed $50,000 annually. The previous limit was set at $35,000.


8,923degrees awarded

in 2020.

Ranked 13th among U.S. universities in

bachelor’s degrees awarded to Hispanic students.

Texas State ranks 4th among Texas public universities in the number of degrees and certificates awarded to economically

disadvantaged students in 2019.

DEVELOPING PASSIONATE AND EXCEPTIONAL GRADUATES

Our 81% graduation rate for master’s students in 2019 is 2nd among the eight

Emerging Research Universities.

From business to health, fine arts to STEM, and all forms of knowledge in between, our 10 colleges are devoted to research, creativity, discovery, and developing world-class citizens.



$18,602,366 was donated to TXST in FY 2020.

$3,323,359 in student scholarships distributed from 535 endowments.

$2,895,710 in faculty and program support distributed from 164 endowments.

$225,519,535 was the total value of all three university endowments.

THOUSANDS OF BOBCATS, ONE COMMUNITY

We wouldn’t be Texas State without our community. We are honored to have caring benefactors who do everything they can to support and further the mission of Texas State University through contributions that benefit our students, faculty and staff.


OUR RESEARCH IS MAKING AN IMPACT WITHIN AND BEYOND TEXAS

Research and Development Expenditures

have increased by 30% over the past

five years from $54.3 million

in FY16 to $70.7 million in FY20.

During FY20 Texas State researchers

were engaged in 500 independent sponsored projects totaling more than

$42.3 million in expenditures.

285 grants awarded to Texas State in FY20.

31 Undergraduate Research Fellowship program projects in FY20.

Our faculty and students constantly push the boundaries in their disciplines, generating new ideas and turning this knowledge into positive change that affects the world. At Texas State University, we excel in applied research that impacts state and national needs.


Annual Financial Report for the fiscal year ended August 31, 2020Annual Financial Report for the fiscal year ended August 31, 2020

A GEORGETOWN STUDY PLACED THE LONG-TERM ECONOMIC VALUE OF A TXST BACHELOR’S DEGREE AT $965,000.


In 2020, Forbes magazine listed Texas State among “AMERICA’S BEST-IN-STATE EMPLOYERS.”

Ranked the 26th best university nationally

for veterans by Military Times.

The Honor Society of Phi Kappa Phi, the nation’s oldest and most selective, named Texas State its

2020 EXCELLENCE IN INNOVATION AWARD recipient.

In 2020, U.S. News and World Report named Texas State among the

BEST NATIONAL UNIVERSITIES.


Annual Financial Report for the fiscal year ended August 31, 2020Annual Financial Report for the fiscal year ended August 31, 2020

Money magazine named Texas State one of the

“BEST COLLEGES IN AMERICA

RANKED BY VALUE” in 2020.

THE VALUE OF EDUCATIONTexas State University is efficient in the use of funds with a primary focus on instruction.

Public Service $2,269,053.48

Student Services $36,719,885.57

Institutional Support $40,555,630.93

Operation and Maintenance of Plant $44,058,293.35

Academic Support $54,126,434.66

Instruction $214,779,267.78

Scholarship and Fellowships

$91,046,797.88

Auxiliary Enterprises $70,357,499.34

Depreciation and Amortization

$67,665,347.17

Research $61,022,597.31


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MANAGEMENT’S DISCUSSION AND ANALYSIS

The following is Management’s Discussion and Analysis (MD&A) of Texas State University’s (Texas State) financial performance for the fiscal year ended August 31, 2020. The information presented here should be considered in conjunction with other areas of the financial section of this report as well as information presented in the letters of transmittal in the introductory section. FINANCIAL HIGHLIGHTS

• The net position of Texas State was $1.598 billion at August 31, 2020, an increase of $62.9 million or 4.1%, in fiscal year

2020. • Tuition and Fees revenue, net of discounts, grew by $5.4 million or 1.9% as a result of increases in designated tuition as

well as increases in the athletics and electronic course fees. The increases were partially offset by waived or reduced fees associated with the Coronavirus pandemic along with increased discounts.

• During fiscal year 2020 overall student enrollment fell slightly to 38,231 in Fall 2019 which is down 1.1% below 38,661 in Fall of 2018.

Student Enrollment Following a period of strong growth, overall student enrollment has been mostly steady for the past four years. The first graph Student Enrollment by Level reflects all students by level of study as a headcount, and the second graph Semester Credit Hours by Level reflects course load at the various levels of study.

Source: Texas Higher Education Coordinating Board (THECB) Texas Higher Education Enrollments

OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the Texas State financial presentation, which consists of the fund financial statements for enterprise funds and notes to the financial statements. Collectively, this information presents the net position available for university operations as of August 31, 2020 with comparative information as of August 31, 2019, and summarizes any changes in net position for the same. The information available in each of these sections is summarized as follows: Fund Financial Statements All funds over which the University exercises fiscal control and responsibility are presented as of August 31, 2020 and for the year then ended with comparative data presented for August 31, 2019. The operations of each fund are accounted for with a self-balancing set of accounts that comprise its assets, liabilities, revenues and expenses. As a special-purpose government engaged only in business-type activities, the operating funds are presented in a single enterprise fund column for financial reporting purposes. Three primary financial statements are presented for these funds with supporting schedules. The three primary statements are described below.

The Statement of Net Position reflects the assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the University, using the accrual basis of accounting, and presents the financial position of





the University at a specified time. Assets, plus deferred outflows of resources, less liabilities, less deferred inflows of resources, equals net position, which is one indicator of the University’s current financial condition. The changes in net position that occur over time indicate improvement or deterioration in the University’s financial condition. The Statement of Revenues, Expenses, and Changes in Net Position presents the University’s revenue and expense activity, categorized as operating and nonoperating. Revenues and expenses are recognized when earned or incurred, regardless of when cash is received or paid. The Statement of Cash Flows provides information about the University’s financial results by reporting the major sources and uses of cash and cash equivalents. This statement will assist in evaluating the University’s ability to generate net cash flows, its ability to meet its financial obligations as they come due, and its need for external financing. Cash flows from operating activities show the net cash used by the operating activities of the University. Cash flows from capital financing activities include all plant funds and related long-term debt activities. Cash flows from investing activities show the net source and use of cash related to purchasing or selling investments, and earning income on those investments. Cash flows from noncapital financing activities include those activities not covered in other sections. The Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position are used to account for Custodial Fund’s resources held for the benefit of parties external to the University.

Notes to the Financial Statements The notes to the financial statements are an integral part of the financial statements and provide additional information that is essential to a full understanding of the data provided in the fund financial statements.

• The relationships that Texas State University has with the Texas State University System (TSUS) and the State of Texas are described in Note 1-Summary of Significant Accounting Policies under the “Reporting Entity” heading.

• The relationships that Texas State University has with its component units are described in Note 1 under the “Reporting Entity” heading as well as in Note 11 The Financial Reporting Entity.

• Bonded Indebtedness issued by the System on behalf of Texas State is described in Note 5 Bonded Indebtedness. • Activity and balances related to Pension and Other Post-Employment Benefit liabilities are reported by the System. This

is described in Note 1 under the Measurement Focus, Basis of Accounting and Basis of Presentation heading. • Capital Asset information such as historical costs and accumulated depreciation or amortization is presented in Note 2

Capital Assets. Required Supplementary Information Required supplementary information consists of this Management’s Discussion and Analysis which is prepared in accordance with Governmental Accounting Standards Board (GASB) Statement 34-Basic Financial Statements- and Management’s Discussion and Analysis- for State and Local Governments. FINANCIAL ANALYSIS Statement of Net Position The Statement of Net Position indicates an increase in net position to $1.598 billion in 2020 over $1.536 billion in 2019, representing a 4.1% increase. Total assets increased $65.5 million, or 3.6% primarily attributable to an increase in cash and investments. Total liabilities remained mostly stable with offsetting increases and decreases between categories. Unearned revenues were down at year-end for the beginning of the Fall semester due to Coronavirus related fee reductions. Texas State continues to implement capital improvements to upgrade facilities. Approximately $19.9 million in capital commitments have been entered into or were outstanding as of fiscal year-end 2020 for the construction and renovation of various facilities. These projects are in various stages of completion. The capital projects are being funded in part by bond proceeds. TSUS issues debt through the Revenue Financing System on behalf of the Texas State and reports that debt in the TSUS financial statements. Details about debt outstanding are described in Note 5 Bonded Indebtedness. A portion of the debt




outstanding represents tuition revenue bonds (TRBs) historically funded by the Texas Legislature through General Revenue appropriations. For the fiscal years ended August 31, 2020 and 2019, the institution was appropriated $17,369,676 and $17,387,991, respectively, for TRB debt service. Texas State expects future Legislative appropriations to meet debt service requirements for TRBs.

Statement of Net Position-Condensed

2020 2019 Dollar

Change Percentage

Change Assets Cash and Investments $ 621,415,937.17 $ 571,557,593.33 $ 49,858,343.84 8.7% Receivables 74,977,006.41 71,846,343.21 3,130,663.20 4.4% Legislative Appropriations 66,511,954.61 60,536,553.55 5,975,401.06 9.9% Capital Assets, Net 1,091,618,674.07 1,084,507,373.68 7,111,300.39 0.7% Other Assets 42,202,195.01 42,742,031.65 (539,836.64) -1.3% Total Assets $1,896,725,767.27 $1,831,189,895.42 $ 65,535,871.85 3.6% Liabilities Payables $ 70,084,591.91 $ 65,001,665.08 $ 5,082,926.83 7.8% Unearned Revenues 214,537,879.37 218,000,269.74 (3,462,390.37) -1.6% Employees Compensable Leave-Current 8,078,392.53 7,626,579.19 451,813.34 5.9% Employees Compensable Leave- Non-Current 5,559,074.66 4,968,086.10 590,988.56 11.9% Other Liabilities 45,096.91 43,446.18 1,650.73 3.8% Total Liabilities $ 298,305,035.38 $ 295,640,046.29 $ 2,664,989.09 0.9% Net Position Invested in Capital Assets, Net of Debt $1,091,618,674.07 $1,084,507,373.68 $ 7,111,300.39 0.7% Restricted Net Position 81,829,899.37 94,522,670.66 (12,692,771.29) -13.4% Unrestricted Net Position 424,972,158.45 356,519,804.79 68,452,353.66 19.2% Total Net Position $1,598,420,731.89 $1,535,549,849.13 $ 62,870,882.76 4.1%





Statement of Revenues, Expenses and Changes in Net Position The Statement of Revenues, Expenses and Changes in Net Position reflects an Increase in Net Position for the year ended August 31, 2020 of $62.9 million as compared to an increase of $18.3 million for the year ended 2019. Tuition and Fees revenue, net of discounts, grew by $5.4 million or 1.9% as a result of increases in designated tuition as well as increases in the athletics and electronic course fees. The increases were partially offset by waived or reduced fees associated with the Coronavirus pandemic along with increased discounts. Grant Revenue increased $27.5M primarily due to receipt of $31.8M in Coronavirus Aid, Relief, and Economic Security (CARES) Act funds received in fiscal year 2020 as part of the congressional relief provisions for the pandemic. The increase from CARES Act grant funds were offset slightly by reductions in other grants. Auxiliary Sales decreased 3.7% due to remote instruction and reduced student interaction on campus. Operating expenses increased by 5.5% largely attributable to $28.3M in scholarships awarded through the CARES Act program and in refunds to students. Increases in depreciation expense of $6.6M were incurred, primarily for recently completed buildings and renovations.

Statement of Revenues, Expenses and Changes in Net Position-Condensed

2020 2019 Dollar

Change Percentage

Change Revenues (Operating and Non-Operating) Tuition and Fees, Net $ 285,958,975.52 $ 280,579,713.62 $ 5,379,261.90 1.9% Grant Revenue 170,800,566.61 143,304,388.87 27,496,177.74 19.2% Auxiliary and Other Sales Goods, Services 96,978,931.68 100,658,557.46 (3,679,625.78) -3.7% Legislative Revenue 150,003,724.40 135,040,413.79 14,963,310.61 11.1% Investment Income 21,880,355.61 18,383,925.33 3,496,430.28 19.0% Other Revenues 14,670,416.88 10,473,508.66 4,196,908.22 40.1% Total Revenues $ 740,292,970.70 $ 688,440,507.73 $ 51,852,462.97 7.5% Expenses (Operating and Non-Operating) Operating Expenses $ 614,935,460.30 $ 582,884,988.06 $ 32,050,472.24 5.5% Depreciation and Amortization 67,665,347.17 61,111,778.45 6,553,568.72 10.7% Non-Operating Expenses 310,109.90 1,910,102.11 (1,599,992.21) -83.8% Total Expenses $ 682,910,917.37 $ 645,906,868.62 $ 37,004,048.75 5.7% Income/(Loss) before Other Revenues, Expenses, Gains/(Losses) and Transfers $ 57,382,053.33 $ 42,533,639.11 $ 14,848,414.22 34.9% Other Revenues, Expenses, Gains/(Losses) and Transfers

HEF Appropriation and Transfers, Net $ 16,099,727.76 $ 15,310,375.58 789,352.18 5.2% Additions to Permanent & Term

Endowments 195,553.29 441,999.25 (246,445.96) -55.8% Other Gains/(Losses) and Transfers (10,806,451.62) $ (39,942,649.76) 29,136,198.14 -72.9% Total Other Revenue, (Expenses),

Gains/(Losses) and Transfers $ 5,488,829.43 $ (24,190,274.93) $ 29,679,104.36 -122.7% Change in Net Position $ 62,870,882.76 $ 18,343,364.18 $ 44,527,518.58 242.74% Beginning Net Position 1,535,549,849.13 $1,517,206,484.95 18,343,364.18 1.21% Ending Net Position $1,598,420,731.89 $1,535,549,849.13 $ 62,870,882.76 4.09%




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2020 2019ASSETS AND DEFERRED OUTFLOWS Current Assets: Unrestricted Cash and Cash Equivalents: Cash on Hand 37,984.26$ 49,165.92$ Cash in Bank (Note 3) 5,533,760.57 655,562.93 Cash in Transit/Reimbursement from Treasury 277,995.96 825,646.44 Cash in State Treasury 20,060,876.04 22,243,000.30 Cash Equivalents (Note 3) 294,834,188.26 197,211,452.63 Restricted Cash and Cash Equivalents: Cash in Bank (Note 3) 4,673.71 5,025.42 Cash Equivalents (Note 3) 18,923,463.77 34,108,854.35 Legislative Appropriations 66,511,954.61 60,536,553.55 Net Receivables (Note 1) Federal 8,206,667.13 8,075,589.67 Interest and Dividends 11,207.35 21,923.59 Student Accounts 54,948,919.80 49,336,709.99 Gifts Receivable - Pledges 1,069,066.89 1,468,342.89 Other 4,110,544.70 5,329,220.33 Due From Other Agencies (Note 8) 2,602,543.85 2,887,229.41 Consumable Inventories 852,602.39 841,940.45 Merchandise Inventories 166,878.98 166,533.92 Prepaid Items 41,182,713.64 41,733,557.28 Loans and Contracts 3,044,578.86 3,245,519.82 Total Current Assets 522,380,620.77$ 428,741,828.89$

Non-Current Assets: Restricted: Gifts Receivable - Pledges 839,577.55$ 1,364,168.66$ Investments (Note 3) 43,590,947.50 41,627,499.25 Loans and Contracts 143,900.28 117,638.85 Investments (Note 3) 238,152,047.10 274,831,386.09 Capital Assets, Non-Depreciable (Note 2) 105,936,937.75 122,277,127.31 Capital Assets, Net of Accumulated Depreciation (Note 2) 985,195,485.23 962,053,781.53 Intangible Assets, Net of Accumulated Amortization (Note 2) 486,251.09 176,464.84 Total Non-Current Assets 1,374,345,146.50$ 1,402,448,066.53$ Total Assets 1,896,725,767.27$ 1,831,189,895.42$

DEFERRED OUTFLOWS Derivative Hedging Instrument Assets -$ -$ Deferred Outflows of Resources - - Total Deferred Outflows -$ -$ Total Assets and Deferred Outflows 1,896,725,767.27$ 1,831,189,895.42$

STATEMENT OF NET POSITIONAS OF AUGUST 31, 2020 (With Comparative Data for August 31, 2019)

Enterprise Funds

TEXAS STATE UNIVERSITYStatement of Net Position as of August 31, 2020 with Comparative Data for August 31, 2019


2020 2019LIABILITIES AND DEFERRED INFLOWS Current Liabilities: Accounts Payable 50,530,005.14$ 49,120,450.75$ Accrued Payroll 19,233,097.18 15,743,559.15 Unearned Revenues 214,537,879.37 218,000,269.74 Due to Other Agencies (Note 8) 321,489.59 137,655.18 Employees' Compensable Leave (Note 4) 8,078,392.53 7,626,579.19 Other Current Liabilities 45,096.91 43,446.18 Total Current Liabilities 292,745,960.72$ 290,671,960.19$

Non-Current Liabilities: Employees' Compensable Leave (Note 4) 5,559,074.66$ 4,968,086.10$ Total Non-Current Liabilities 5,559,074.66$ 4,968,086.10$ Total Liabilities 298,305,035.38$ 295,640,046.29$

DEFERRED INFLOWS Derivative Hedging Instrument Liabilities -$ -$ Deferred Inflows of Resources - - Total Deferred Inflows -$ -$

Total Liabilities and Deferred Inflows 298,305,035.38$ 295,640,046.29$

NET POSITION Invested in Capital Assets, Net of Related Debt 1,091,618,674.07$ 1,084,507,373.68$ Restricted for: Capital Projects 16,729,518.76 31,145,978.32 Funds Held as Permanent Investments: Non-Expendable 21,275,174.05 20,954,428.60 Expendable (Note 13) 22,835,664.06 21,403,604.08 Other 20,989,542.50 21,018,659.66 Unrestricted 424,972,158.45 356,519,804.79 Total Net Position 1,598,420,731.89$ 1,535,549,849.13$

The accompanying Notes to the Financial Statements are an integral part of this financial statement.

See Independent Certified Public Accountant's Review Report.

Enterprise Funds



2020 2019OPERATING REVENUESSales of Goods and Services: Tuition and Fees 401,436,802.36$ 390,579,057.38$ Discounts and Allowances (Note 1) (115,477,826.84) (109,999,343.76) Auxiliary Enterprises 82,836,513.19 86,184,422.47 Other Sales of Goods and Services 14,142,418.49 14,474,134.99 Federal Revenue-Operating 30,835,242.58 34,151,653.95 Federal Pass Through Revenue 3,172,571.92 3,288,010.00 State Grant Revenue 660,089.31 2,175,378.22 State Grant Pass Through Revenue 34,516,458.60 31,536,220.58 Other Grants & Contracts 6,013,002.89 6,311,254.02 Other Operating Revenue 749,575.59 738,834.93 Total Operating Revenues 458,884,848.09$ 459,439,622.78$

OPERATING EXPENSESInstruction 214,779,267.78$ 218,093,235.91$ Research 61,022,597.31 57,341,069.47 Public Service 2,269,053.48 4,241,082.57 Academic Support 54,126,434.66 50,899,995.07 Student Services 36,719,885.57 35,946,568.48 Institutional Support 40,555,630.93 36,799,539.01 Operation and Maintenance of Plant 44,058,293.35 44,013,673.57 Scholarship and Fellowships 91,046,797.88 55,532,937.63 Auxiliary Enterprises 70,357,499.34 80,016,886.35 Depreciation and Amortization 67,665,347.17 61,111,778.45 Total Operating Expenses 682,600,807.47$ 643,996,766.51$ Operating Income (Loss) (223,715,959.38)$ (184,557,143.73)$

NONOPERATING REVENUES (EXPENSES)Legislative Revenue 120,815,161.00$ 109,079,130.00$ Additional Appropriations 29,188,563.40 25,961,283.79 Federal Grant - Non Exchange 92,054,039.31 60,559,257.10 State Pass Through - Non Exchange 3,549,162.00 5,282,615.00 Gifts, Pledges, and Donations 11,075,756.78 9,030,607.82 Investment Income 12,339,656.31 22,399,682.33 Net Increase (Decrease) in Fair Value of Investments 9,540,699.30 (4,015,757.00) Gain (Loss) on Sales of Capital Assets (211,752.22) (62,724.13) Other Nonoperating Revenues 3,056,836.73 766,790.04 Other Nonoperating Expenses (310,109.90) (1,910,102.11) Total Nonoperating Revenues (Expenses) 281,098,012.71$ 227,090,782.84$

Income (Loss) before Other Revenues, Expenses, Gains, Losses and Transfers 57,382,053.33$ 42,533,639.11$

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITIONFOR THE FISCAL YEAR ENDED AUGUST 31, 2020 (With Comparative Data for August 31, 2019)

Enterprise Funds

TEXAS STATE UNIVERSITYStatement of Revenues, Expenses, and Changes in Net Position for the Fiscal Year ended August 31, 2020 with Comparative Data for August 31, 2019


2020 2019OTHER REVENUES, EXPENSES, GAINS,LOSSES, AND TRANSFERSHEF Appropriation Revenue 37,162,755.00$ 37,162,755.00$ Additions to Permanent and Term Endowments 195,553.29 441,999.25 Transfers From Other Governmental Agencies (Note 8) 34,144,503.37 2,034,933.81 Transfers To Other Governmental Agencies (Note 8) (44,950,954.99) (41,977,583.57) Legislative Transfers-In (Note 8) 1,389,375.00 1,386,066.00 Legislative Transfers-Out (Note 8) (22,452,402.24) (23,238,445.42) Total Other Revenues, Expenses, Gains/Losses and Transfers 5,488,829.43$ (24,190,274.93)$

Change in Net Position 62,870,882.76$ 18,343,364.18$

Net Position, September 1 1,535,549,849.13$ 1,517,206,484.95$ Restatements - Net Position, September 1, as Restated 1,535,549,849.13$ 1,517,206,484.95$ Net Position, August 31 1,598,420,731.89$ 1,535,549,849.13$



Enterprise Funds



Enterprise Funds

Public Academic StudentOperating Expenses Instruction Research Service Support Services

Cost of Goods Sold -$ -$ -$ -$ -$

Salaries and Wages 154,378,751.53 31,558,477.70 824,149.09 31,106,212.25 19,856,724.17

Payroll Related Costs 46,069,320.72 7,663,658.42 415,783.18 8,395,212.31 5,989,993.94

Professional Fees and Services 3,093,411.52 11,863,067.36 439,723.92 2,863,019.31 5,050,387.78

Federal Grant Pass-Through Expense - 856,155.92 - - -

State Grant Pass-Through Expense - 2,756.34 - - -

Travel 1,103,424.28 1,924,179.15 74,725.64 365,058.31 427,111.93

Materials and Supplies 7,200,809.71 4,934,181.75 340,198.55 9,372,677.46 3,666,761.10

Communication and Utilities 99,399.79 89,871.40 2,886.11 123,777.86 118,795.02

Repairs and Maintenance 544,775.76 369,776.57 31,755.13 1,285,736.66 541,556.70

Rentals and Leases 181,866.82 483,966.11 93,933.84 26,799.73 114,630.03

Printing and Reproduction 545,831.07 395,815.38 32,791.45 245,005.36 576,173.33

Depreciation and Amortization

Interest 58.60 1,152.70 0.57 27.45 8.45

Scholarships - - - - -

Claims and Judgments 1,465,793.59 442,863.69 8,734.47 285,707.24 347,188.59

Other Operating Expenses 95,824.39 436,674.82 4,371.53 57,200.72 30,554.53

Total Operating Expenses 214,779,267.78$ 61,022,597.31$ 2,269,053.48$ 54,126,434.66$ 36,719,885.57$



For the Fiscal Year Ended August 31, 2020

FOR THE FISCAL YEAR ENDED AUGUST 31, 2020 (With Comparative Data for August 31, 2019)MATRIX OF OPERATING EXPENSES REPORTED BY FUNCTION

TEXAS STATE UNIVERSITYMatrix of Operating Expenses Reported by Function for the fiscal year ended August 31, 2020 with Comparative Data for August 31, 2019


Operation and Scholarships Auxiliary DepreciationInstitutional Maintenance and Enterprise and Total

Support of Plant Fellowships Expenditures Amortization Expenses

-$ -$ -$ 336,223.09$ 336,223.09$

26,075,568.19 15,026,636.35 - 18,255,610.75 297,082,130.03

7,830,447.91 5,515,689.53 - 5,777,833.28 87,657,939.29

2,353,877.18 4,366,641.50 - 10,353,704.47 40,383,833.04

- - - - 856,155.92

- - - - 2,756.34

285,397.55 35,181.86 - 2,425,752.19 6,640,830.91

1,632,239.29 3,566,036.98 - 21,556,541.18 52,269,446.02

14,586.38 13,244,889.46 - 7,655,807.32 21,350,013.34

1,087,496.23 1,767,340.02 - 2,875,719.15 8,504,156.22

63,429.69 69,166.06 - 388,846.59 1,422,638.87

291,564.61 68,939.84 - 246,386.87 2,402,507.91

67,665,347.17 67,665,347.17

16,652.78 1,914.88 - 18.92 19,834.35

- - 91,046,797.88 - 91,046,797.88

855,308.96 395,856.87 - 465,536.07 4,266,989.48

49,062.16 - - 19,519.46 693,207.61

40,555,630.93$ 44,058,293.35$ 91,046,797.88$ 70,357,499.34$ 67,665,347.17$ 682,600,807.47$

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Enterprise Funds

Public Academic StudentOperating Expenses Instruction Research Service Support Services

Cost of Goods Sold -$ -$ -$ -$ -$

Salaries and Wages 150,875,621.77 27,390,155.03 1,646,496.56 30,642,134.69 20,057,911.71

Payroll Related Costs 45,597,857.75 6,237,876.30 673,356.72 7,715,661.18 5,674,001.02

Professional Fees and Services 3,620,705.35 12,890,093.35 1,236,430.43 2,888,438.64 4,711,953.07

Federal Grant Pass-Through Expense - 612,143.57 - - -

Travel 3,616,605.00 3,013,826.54 131,855.87 769,185.88 954,620.33

Materials and Supplies 12,661,239.08 5,207,731.35 365,203.60 6,021,852.06 3,125,740.87

Communication and Utilities 164,688.77 190,609.07 6,450.02 126,500.35 150,588.34

Repairs and Maintenance 650,434.21 263,953.94 58,806.58 2,293,714.79 311,997.12

Rentals and Leases 175,958.85 551,751.43 71,722.88 55,934.03 199,202.95

Printing and Reproduction 598,879.41 408,349.00 44,746.41 324,641.92 641,936.30

Depreciation and Amortization - - - - -

Interest 641.04 698.48 21.04 583.97 141.60

Scholarships - - - - -

Claims and Judgments - - 4,393.87 - 85,108.68

Other Operating Expenses 130,604.68 573,881.41 1,598.59 61,347.56 33,366.49

Total Operating Expenses 218,093,235.91$ 57,341,069.47$ 4,241,082.57$ 50,899,995.07$ 35,946,568.48$



MATRIX OF OPERATING EXPENSES REPORTED BY FUNCTION

For the Fiscal Year Ended August 31, 2019

FOR THE FISCAL YEAR ENDED AUGUST 31, 2020 (With Comparative Data for August 31, 2019)

TEXAS STATE UNIVERSITYMatrix of Operating Expenses Reported by Function for the fiscal year ended August 31, 2020 with Comparative Data for August 31, 2019


Operation and Scholarships Auxiliary DepreciationInstitutional Maintenance and Enterprise and Total

Support of Plant Fellowships Expenditures Amortization Expenses

-$ -$ -$ 561,440.09$ -$ 561,440.09$

24,167,507.84 14,814,220.17 - 18,183,308.76 - 287,777,356.53

6,925,995.17 5,397,947.81 - 5,667,219.93 - 83,889,915.88

1,530,681.64 4,819,003.80 - 13,321,535.96 - 45,018,842.24

- - - - - 612,143.57

497,073.16 44,675.69 - 3,324,713.60 - 12,352,556.07

983,911.68 4,546,120.19 - 25,797,394.59 - 58,709,193.42

604,354.14 11,872,428.48 - 9,173,923.24 - 22,289,542.41

1,274,285.45 2,413,100.53 - 1,810,622.64 - 9,076,915.26

343,494.55 63,038.58 - 866,820.47 - 2,327,923.74

380,117.77 42,360.44 - 249,381.68 - 2,690,412.93

- - - - 61,111,778.45 61,111,778.45

18,042.47 777.88 - 275.57 - 21,182.05

- - 55,532,937.63 - - 55,532,937.63

17,511.81 - - 1,040,969.78 - 1,147,984.14

56,563.33 - - 19,280.04 - 876,642.10

36,799,539.01$ 44,013,673.57$ 55,532,937.63$ 80,016,886.35$ 61,111,778.45$ 643,996,766.51$



2020 2019CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers 14,117,821.10$ 14,593,243.59$ Proceeds from Tuition and Fees 279,460,944.73 281,597,318.29 Proceeds from Research Grants and Contracts 75,000,261.61 77,560,694.37 Proceeds from Loan Programs 7,230,713.73 9,395,298.30 Proceeds from Auxiliaries 79,125,051.12 87,120,520.30 Proceeds from Other Operating Revenues 1,421,169.41 670,375.40 Payments to Suppliers for Goods and Services (132,151,054.45) (152,330,270.11) Payments to Employees for Salaries (289,841,105.19) (288,008,273.25) Payments to Employees for Benefits (61,860,936.13) (64,125,598.20) Payments for Loans Provided (6,922,705.70) (9,487,190.24) Payments for Other Expenses (92,763,352.66) (62,608,967.95) Net Cash Provided (Used) by Operating Activities (127,183,192.43)$ (105,622,849.50)$

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESProceeds from State Appropriations 125,567,503.81$ 122,187,134.34$ Proceeds from Gifts 12,014,297.82 10,383,631.74 Proceeds of Transfers from Other Funds 35,533,878.37 3,420,999.81 Proceeds from Grant Receipts 95,810,078.21 65,819,644.07 Proceeds from Other Noncapital Financing Activities 3,057,833.55 769,116.56 Payments for Other Noncapital Financing Uses (8,346,974.71) (7,047,817.97) Net Cash Provided (Used) by Noncapital Financing Activities 263,636,617.05$ 195,532,708.55$

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESProceeds from Sale of Capital Assets (270,766.94)$ 149,649.37$ Proceeds from Other Financing Activities 37,162,755.00 37,162,755.00 Payments for Additions to Capital Assets (83,751,556.84) (117,830,116.54) Payments of Principal on Debt Issuance (46,359,214.43) (32,357,962.68) Payments of Interest on Debt Issuance (15,274,943.80) (27,924,639.42) Net Cash Provided (Used) by Capital and Related Financing Activities (108,493,727.01)$ (140,800,314.27)$

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from Sales of Investments 96,866,797.18$ 180,255,861.70$ Proceeds from Investment Income 12,762,841.32 30,691,546.58 Payments to Acquire Investments (53,015,101.53) (305,451,631.47) Net Cash Provided (Used) by Investing Activities 56,614,536.97$ (94,504,223.19)$

Increase (Decrease) in Cash and Cash Equivalents 84,574,234.58$ (145,394,678.41)$ Cash and Cash Equivalents, September 1 255,098,707.99$ 402,957,750.98$

Restatement to Cash and Cash Equivalents (2,464,364.58) Cash and Cash Equivalents, as Restated 255,098,707.99 400,493,386.40 Cash and Cash Equivalents, August 31 339,672,942.57$ 255,098,707.99$

Enterprise Funds

STATEMENT OF CASH FLOWSFOR THE FISCAL YEAR ENDED AUGUST 31, 2020 (With Comparative Data for August 31, 2019)

TEXAS STATE UNIVERSITYStatement of Cash Flows for the fiscal year ended August 31, 2020 with Comparative Data for August 31, 2019


2020 2019RECONCILIATION OF OPERATING INCOME (LOSS) TONET CASH PROVIDED (USED) BY OPERATING ACTIVITIESOperating Income (Loss) (223,715,959.38)$ (184,557,143.73)$

Adjustments to Reconcile Operating Income to Net Cash Provided (Used) by Operating Activities: Amortization and Depreciation 67,665,347.17$ 61,111,778.45$ Operating Income and Cash Flow Categories: Changes in Assets and Liabilities: (Increase) Decrease in Receivables (4,778,533.11)$ (1,879,772.30)$ (Increase) Decrease in Due from Other Agencies 284,685.56 (265,862.52) (Increase) Decrease in Inventories (11,007.00) 2,137,339.69 (Increase) Decrease in Prepaid Expenses 2,096,762.65 (2,812,383.00) (Increase) Decrease in Loans & Contracts 174,679.53 203,047.09 (Increase) Decrease in State Appropriations 18,576,177.95 16,960,161.81 Increase (Decrease) in Payables 11,270,870.23 (2,357,679.75) Increase (Decrease) in Due to Other Funds 183,834.41 (469,439.27) Increase (Decrease) in Unearned Revenue (3,462,390.37) 6,284,111.43 Increase (Decrease) in Compensated Absence Liability 451,813.34 130,141.07 Increase (Decrease) in Benefits Payable 4,080,526.59 (107,148.47) Total Adjustments 96,532,766.95$ 78,934,294.23$

Net Cash Provided (Used) by Operating Activities (127,183,192.43)$ (105,622,849.50)$

NON-CASH TRANSACTIONSNet Change in the Fair Value of Investments 9,540,699.30$ (4,015,757.00)$ Donation of Capital Assets 212,923.34$ 39,600.00$ Gain (Loss) on Sale of Capital Assets 59,014.72$ (212,373.50)$



Enterprise Funds



Custodial Funds Custodial Funds2020 2019

ASSETS Cash

Cash on Hand 100.00$ 100.00$ Cash in Bank (Note 3) 1,856,150.05 2,302,687.56

Receivables (Note 1)Accounts Receivable 17,884.10 - Other 5,730.34 -

Total Assets 1,879,864.49$ 2,302,787.56$

LIABILITIESAccounts Payable 144,361.71$ -$ Other Current Liabilities 15,415.84

Total Liabilities 159,777.55$ -$

NET POSITIONRestricted for Individuals, Organizations or Other Governments 1,720,086.94$ 2,302,787.56$

Total Net Position 1,720,086.94$ 2,302,787.56$



STATEMENT OF FIDUCIARY NET POSITIONAS OF AUGUST 31, 2020 (With Comparative Data for August 31, 2019)

TEXAS STATE UNIVERSITYStatement of Fiduciary Net Position as of August 31, 2020


Custodial Funds Custodial Funds2020 2019

ADDITIONSContributions:

Loan and Scholarship Revenue 27,653,512.45$ 28,706,808.44$ Student Club Revenue 398,111.54 432,269.56 Non-Student Revenue 395,855.08 640,548.50

Total Contributions 28,447,479.07 29,779,626.50

Investment Income:Interest, Dividends and Other 1,800.65 1,826.37

Total Net Investment Income 1,800.65 1,826.37

Other Additions:Other Revenue 8,469.33 125,121.90

Total Other Additions 8,469.33 125,121.90

Total Additions 28,457,749.05$ 29,906,574.77$

DEDUCTIONSLoan and Scholarship Expense 28,129,255.74$ 28,918,028.69$ Administrative Expenses:

Communications and Utilities 635.98 819.74 Materials and Supplies 85,643.59 145,540.10 Printing and Reproduction 20,488.90 37,371.18 Professional Fees and Services 295,624.46 231,203.81 Rentals and Leases 186,602.83 105,627.14 Other Administrative Expenses 322,198.17 629,561.13 Total Deductions 29,040,449.67$ 30,068,151.79$

Change in Net Position (582,700.62)$ (161,577.02)$

Net Position, September 1 2,302,787.56$ -$ Restatements 2,464,364.58 Net Position, September 1, as Restated 2,302,787.56$ 2,464,364.58$ Net Position, August 31 1,720,086.94$ 2,302,787.56$



STATEMENT OF CHANGES IN FIDUCIARY NET POSITIONFOR THE FISCAL YEAR ENDED AUGUST 31, 2020 (With Comparative Data for August 31, 2019)


TEXAS STATE UNIVERSITYStatement of Changes in Fiduciary Net Position for the Fiscal Year ended August 31, 2020


NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: Summary of Significant Accounting Policies NATURE OF OPERATIONS AND HISTORY Texas State University (Texas State) is a doctoral-granting, student-centered institution dedicated to excellence and innovation in teaching, research, including creative expression, and service. The university strives to create new knowledge, to embrace a diversity of people and ideas, to foster cultural and economic development, and to prepare its graduates to participate fully and freely as citizens of Texas, the nation, and the world. The university was first authorized by the Texas legislature in 1899, and Southwest Texas State Normal School opened its doors in 1903. Over the years, the school has broadened its scope and changed its name a few times as well:

1918: Southwest Texas State Normal College 1923: Southwest Texas State Teachers College 1959: Southwest Texas State College 1969: Southwest Texas State University 2003: Texas State University-San Marcos 2013: Texas State University

Each name reflects the evolution from a small teaching institution to a major, multi-purpose university. Through the nine academic colleges, Texas State offers more than 200 undergraduate and post-graduate degrees to serve the needs of future generations of Texans. Texas State is the only university in Texas to have graduated a U.S. president or vice president. President Johnson's memory remains alive on campus through the LBJ Student Center, the university's Lyndon Baines Johnson Distinguished Lecture Series and the LBJ Statue. Johnson returned to Texas State many times. In 1965, he returned to his alma mater to sign the Higher Education Act, which opened the doors of higher education to many who could not previously afford it. REPORTING ENTITY Texas State University is a part of the legal entity and primary government of the State of Texas and is governed by the Texas State University System (TSUS) nine-member Board of Regents appointed by the governor and confirmed by the Senate. Texas State University’s financial activity is consolidated along with the remaining seven components of the system into the system-wide financial report of TSUS. The system-wide report is further consolidated into the Comprehensive Annual Financial Report (CAFR) for the State of Texas. CAFRs for the State of Texas may be obtained from the Texas Comptroller of Public Accounts website: https://www.comptroller.texas.gov/transparency/reports/comprehensive-annual-financial. Texas State University System is reported as a proprietary fund within the statewide CAFR. The State Auditor expresses an opinion on the CAFR, but not on the financial statements of individual state agencies or universities contained therein. This financial report includes all activities and programs for which Texas State University exercises fiscal control and responsibility and includes all funds that comprise the university’s financial reporting entity. The financial reporting entity consists of Texas State University’s funds, as the primary government, plus any closely related entities for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship would be misleading to exclude. As a result of their relationships with Texas State, the Texas State University Research Foundation and the Harold M. Freeman Educational Foundation are included in the financial statements of Texas State as blended component units. Other entities are reported as affiliated organizations and are not included in the basic financial statements. For details on those organizations, refer to the Related Organizations note later in this section. Copies of this Annual Financial Report may be obtained by contacting Texas State University, Director of Accounting, General Accounting Office, 601 University Drive, JCK 589, San Marcos, TX 78666-4684. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND BASIS OF PRESENTATION Texas State University’s accounts are organized on the basis of funds, each of which is considered a separate accounting entity according to governmental accounting. The operations of each fund are accounted for with a self-balancing set of accounts that comprise its assets, liabilities, revenues, and expenses. As a special-purpose government engaged only in business-type activities, the operating funds are presented in a single enterprise fund column for financial reporting purposes. Three primary financial statements are presented with supporting schedules: the Statement of Net Position; the Statement of Revenues, Expenses, and

TEXAS STATE UNIVERSITY Notes to the Financial Statements



Changes in Net Position; the Statement of Cash Flows and the supporting schedule Matrix of Operating Expenses Reported by Function. Accounting principles similar to those used by private-sector businesses are applied in accounting for these funds. Custodial Funds are used to report fiduciary activities that are not required to be reported in pension trust funds, investment trust funds or private-purpose trust funds. Balances and activities are recorded using the accrual basis of accounting and represent amounts held for individuals, organizations or other governments. Two primary financial statements are presented: the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position. These statements are new in fiscal year 2020 with the implementation of GASB 84 Fiduciary Activities. The accompanying statements have been prepared in accordance with Generally Accepted Accounting Principles (GAAP) using the economic resources measurement focus and accrual basis of accounting as prescribed by the Governmental Accounting Standards Board (GASB), with the exception of the items described below, and in accordance with state statutes and regulations. The Texas Comptroller of Public Accounts issues the Reporting Requirements for Annual Financial Reports (AFRs) of State Agencies and Universities for purposes of consolidation at the state-wide level. As an individual university, Texas State’s AFR complies with the State Comptroller’s requirements. Certain elements of a typical stand-alone report are omitted at the individual level in accordance with the Reporting Requirements for Annual Financial Reports (AFRs), because they are reported at the system-level of TSUS or at the consolidated Texas Comprehensive Annual Financial Report (CAFR) level. These reporting requirements do not require components of university systems to record their portion of pension liabilities under GASB 67 Accounting and Financial Reporting for Pensions — an amendment of GASB Statement No. 27 or their retiree healthcare liabilities under GASB 75 Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Instead the related liabilities are recorded at the system level in the TSUS report described above. The basis of accounting determines when revenues and expenses are recognized and reported in the financial statements. Under the accrual basis, revenues are recognized when earned and expenses are recognized when the liability is incurred. The enterprise or business-type activities are financed in whole or in part by fees charged to external parties for goods or services and focus on determining operating income, changes in net position, financial position, and cash flows. Operating items are distinguished from non-operating items. Operating revenues and expenses result from providing services or producing and delivering goods in connection with the principle of ongoing operations. Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All significant inter-fund transactions have been eliminated. BUDGETS, APPROPRIATIONS AND RESTRICTED RESOURCES The administrative costs and capital asset outlay for the university are controlled by annual budgets approved by university management and the TSUS Board of Regents. As a state university, Texas State University received appropriations from the state for a portion of its operations in the form of Legislative Revenue and Legislative Transfers In or Out. State appropriations are authorized biennially by the Texas legislature and approved by the governor in the General Appropriations Act. Unencumbered appropriations are generally subject to lapse 60 days after the end of the fiscal year for which they are appropriated. State Appropriations represented approximately 22.2% and 21.2% of total revenues from operations for fiscal years ended August 31, 2020 and 2019, respectively. When both restricted and unrestricted resources are available for use, restricted resources are generally used first, then unrestricted resources are used as needed. CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY (CARES) ACT In response to the Coronavirus (COVID-19) pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the CARES Act for the Higher Education Emergency Relief Fund (HEERF), which provides budgetary relief to higher education institutions through numerous provisions. The act provides economic grants to offset some additional expenses and forgone revenue as a result of the pandemic. Texas State received $31,791,509 from this program in fiscal year 2020. Some additional funds have been awarded but not drawn. USE OF ESTIMATES IN THE PREPARATION OF BASIC FINANCIAL STATEMENTS The preparation of financial statements and related notes to the financial statements requires management to make estimates and assumptions that affect the reported amounts for assets and liabilities at the date of the financial statements and the reported amounts for revenues and expenses during the reporting period. Actual results could differ from those estimates.





A significant estimate for scholarship discounts and allowances is made by the university. Allowances are determined by using the Alternate Method as issued by the National Association of College and University Business Officers in the Advisory Report 2000-05. The Alternate Method acknowledges that in reality most institutions do not post financial aid on a case-by-case basis but rather as of a certain date; therefore, institutions are allowed to use a rational, documented allocation methodology to calculate discounts and allowances. This approach is referred to as the Alternate Method. As of August 31, 2020 and 2019, this method resulted in estimates of $115,477,826.84 and $109,999,343.76, respectively, for the university’s discounts and allowances related to tuition and fees. CURRENT AND NON-CURRENT ASSETS Current assets are those considered available for appropriation and expenditure within one fiscal year. Examples of expendable financial resources include cash, various receivables, and short-term investments. All other assets are considered non-current. CASH AND CASH EQUIVALENTS Cash includes cash on hand, cash in local banks, cash in transit, and cash in the treasury. Cash equivalents are defined as short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash and (b) so near maturity that the risk of changes in value due to changes in interest rates is insignificant. Only investments with an original maturity of three months or less are considered cash equivalents. TexPool, a Local Government Investment Pool, is valued at a stable $1.00 share price and is reported at amortized cost. ACCOUNTS RECEIVABLE Accounts receivable represent amounts for student tuition and fees, grant and contract expense reimbursements, various sales and services provided to students and third parties, loans receivable, investment related transactions, and gifts receivable. Federal accounts include amounts from sponsored program activity as well as financial aid. Gifts receivable represent amounts pledged to the university by donors. Other accounts receivable include year-end revenue accruals or accounts not included in the other categories. Certain accounts are recorded net of allowances. The allowances for those accounts by receivable type and fiscal year are as follows:

Allowances by Receivable Type 2020 2019 Student Accounts $2,121,408.86 $1,691,919.08 Current and Noncurrent Gift Receivables 459,413.45 364,078.81 Loans Receivable 527,888.50 460,385.48

INVESTMENTS Investments are reported at fair value in the Statement of Net Position in accordance with GASB Statement Number 72, Fair Value Measurement and Application. Fair value is defined by GASB 72 as the “price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” INVENTORIES AND PREPAID ITEMS Inventories, including both merchandise and consumable inventories, are valued at cost and expensed when consumed. Payments made for services benefiting periods beyond the current accounting period are recorded as prepaid items. Prepaid scholarships represent funds paid in the current fiscal year relating to the subsequent year. RESTRICTED ASSETS Restricted assets represent resources that are constrained to a particular purpose, such as for endowments, academic programs or construction projects, and either externally imposed by creditors, grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation. CAPITAL ASSETS AND RELATED DEBT ACTIVITY Purchases of assets with (a) an estimated useful life in excess of one year and that (b) exceed the university’s capitalization thresholds are recorded as capital assets at their acquisition cost on the date of acquisition. Donated assets with (a) an estimated




useful life in excess of one year and that (b) exceed the university’s capitalization thresholds are recorded as capital assets at their fair market value on the date of acquisition. Intangible capital assets are defined as assets that lack physical substance, are nonfinancial in nature, and have an initial useful life extending beyond a single reporting period. Routine repairs and maintenance that do not increase building values are charged to operating expenses in the year in which the expenses are incurred. The university’s capitalization thresholds are:

Asset Category Capitalization Threshold Land, land improvements, and permanent land use rights All acquisitions are capitalized Books and materials for the university’s academic and research library All acquisitions are capitalized Works of art and historical treasures not held for financial gain All acquisitions are capitalized Furniture, equipment, and vehicles $5,000 Buildings, building improvements, facilities, and other improvements $100,000 Purchased computer software and term(A) land use rights $100,000 Infrastructure $500,000 Internally generated computer software $1,000,000

(A) Applies only to land use rights considered to have a limited useful life Assets are depreciated or amortized over the estimated useful life of the asset using the straight-line method as follows:

Asset Category Estimated Useful Life Furniture and Equipment 4-15 years Purchased and Internally Developed Software 5 years Vehicles 5-10 years Other Tangible Assets 10 years Term Land Use Rights 10 years Buildings, Infrastructure, and Facilities 10-30 years Other Assets 15 years

All land, land improvements, land use rights, and works of art and historical treasures not held for financial gain are considered to have an indefinite useful life. Because these assets are inexhaustible, they are not depreciated. Bonded indebtedness is issued by the TSUS Revenue Financing System. The Revenue Financing System is comprised of the TSUS administration and the component institutions within TSUS. Although the university must repay debt issued on its behalf, the associated bond liability is reported in total by the TSUS administration and is not included in the liabilities of the university on its financial statements. Debt service requirements reported by the TSUS administration which are attributable to Texas State are disclosed in Note 5, Bonded Indebtedness. ACCOUNTS PAYABLE Accounts Payable represents the liability for the value of assets or services received at the Statement of Net Position date for which payment is pending. OTHER PAYABLES Other payables are the accruals at year-end of expense transactions not included in any of the other payable descriptions. UNEARNED REVENUES Unearned Revenues represents payments received in advance of providing goods or services. NON-CURRENT LIABILITIES Non-current liabilities may arise from debt issuances or other commitments with an expected liquidation date of more than one year from fiscal year end.





EMPLOYEES’ COMPENSABLE LEAVE BALANCES State employees are entitled to be paid for all unused vacation time accrued in the event of resignation, dismissal, or separation from State employment provided the employee has been continuously employed with the State for six months. An expense and liability are recorded as the benefits accrue to employees. No liability is recorded for non-vesting accumulating rights to receive sick pay benefits. Compensable leave liabilities are reported as either current or non-current in the Statement of Net Position. The current portion is that which is expected to be paid within one year. The non-current portion has an expected payment date of more than one year. INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT Invested in Capital Assets, Net of Related Debt consists of capital assets, net of accumulated depreciation and reduced by outstanding balances for bonds, notes, and other debt attributed to the acquisition, construction, or improvement of those assets. RESTRICTED NET POSITION Restricted net position consists of restricted assets less liabilities and deferred inflows of resources related to those assets. This represents resources that are constrained to a particular purpose, such as for endowments, academic programs or construction projects, and either externally imposed by creditors, grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation. UNRESTRICTED NET POSITION Unrestricted net position is the residual amount of total net position less investment in capital assets and restricted net position. Unrestricted net assets often have constraints on resources which are imposed by management, but can be removed or modified. Substantially, all unrestricted net assets are designated for capital projects as well as academic and research programs and initiatives.




TEXAS STATE WAS NAMED ONE OF THE NATION’S BEST UNIVERSITIES FOR UNDERGRADUATES BY THE PRINCETON REVIEW.

2020



NOTE 2: Capital Assets

Changes in capital assets for the fiscal year ended August 31, 2020 are summarized as follows:

Balance9/1/2019 Adjustments Completed CIP

Non-Depreciable Assets: Land and Land Improvements 52,508,014.87$ -$ 542,417.73$ Construction in Progress 60,268,628.64 - (77,961,615.40) Other Assets 9,500,483.80 - - Total Non-Depreciable Assets 122,277,127.31$ -$ (77,419,197.67)$

Depreciable Assets: Buildings and Building Improvements 1,241,374,578.88$ -$ 67,634,120.09$ Infrastructure 81,264,818.95 - 8,638,489.87 Facilities & Other Improvements 172,102,249.87 - 1,146,587.71 Furniture and Equipment 81,717,890.11 - - Vehicle, Boats & Aircraft 10,549,526.79 - - Other Assets 86,474,805.68 - - Total Depreciable Assets at Historical Costs 1,673,483,870.28$ -$ 77,419,197.67$

Less Accumulated Depreciation for: Buildings and Improvements (506,514,278.42)$ -$ -$ Infrastructure (38,919,272.81) - - Facilities & Other Improvements (67,921,337.13) - - Furniture and Equipment (58,701,747.12) - - Vehicles, Boats & Aircraft (5,894,567.09) - - Other Assets (33,478,886.18) - - Total Accumulated Depreciation (711,430,088.75)$ -$ -$ Depreciable Assets, Net 962,053,781.53$ -$ 77,419,197.67$

Amortizable Assets - Intangible: Computer Software 28,713,203.91$ -$ -$ Total Amortizable Assets - Intangible 28,713,203.91$ -$ -$

Less Accumulated Amortization for: Computer Software (28,536,739.07)$ -$ -$ Total Accumulated Amortization (28,536,739.07)$ -$ -$ Amortizable Assets - Intangible, Net 176,464.84$ -$ -$

Capital Assets, Net 1,084,507,373.68$ -$ -$



Interagency BalanceTransfers In Transfers Out Additions Deletions 8/31/2020

-$ -$ -$ -$ 53,050,432.60$ - - 60,711,637.15 - 43,018,650.39 - - 367,370.96 - 9,867,854.76 -$ -$ 61,079,008.11$ -$ 105,936,937.75$

-$ -$ -$ -$ 1,309,008,698.97$ - - - - 89,903,308.82 - - - - 173,248,837.58

- 6,960,752.24 (1,956,435.29) 86,722,207.06 - - 391,030.69 (82,653.73) 10,857,903.75 - 6,246,303.96 (1,076,711.16) 91,644,398.48 -$ -$ 13,598,086.89$ (3,115,800.18)$ 1,761,385,354.66$

-$ -$ (43,968,165.51)$ -$ (550,482,443.93)$ - - (2,563,881.42) - (41,483,154.23) - - (7,803,798.41) - (75,725,135.54)

(6,616,886.89) 1,832,471.25 (63,486,162.76) - - (865,602.80) 81,101.56 (6,679,068.33) - - (5,786,478.89) 931,460.43 (38,333,904.64) -$ -$ (67,604,813.92)$ 2,845,033.24$ (776,189,869.43)$ -$ -$ (54,006,727.03)$ (270,766.94)$ 985,195,485.23$

-$ -$ 370,319.50$ (332,523.82)$ 28,750,999.59$ -$ -$ 370,319.50$ (332,523.82)$ 28,750,999.59$

-$ -$ (60,533.25)$ 332,523.82$ (28,264,748.50)$ -$ -$ (60,533.25)$ 332,523.82$ (28,264,748.50)$ -$ -$ 309,786.25$ -$ 486,251.09$

-$ -$ 7,382,067.33$ (270,766.94)$ 1,091,618,674.07$




Changes in capital assets for the fiscal year ended August 31, 2019 are summarized as follows:

Balance9/1/2018 Adjustments Completed CIP

Non-Depreciable Assets: Land and Land Improvements 50,393,725.74$ -$ -$ Construction in Progress 140,567,611.01 - (175,502,737.49) Other Assets 9,003,943.78 - - Total Non-Depreciable Assets 199,965,280.53$ -$ (175,502,737.49)$

Depreciable Assets: Buildings and Building Improvements 1,076,032,028.12$ -$ 166,531,198.76$ Infrastructure 81,264,818.95 - - Facilities & Other Improvements 163,130,711.14 - 8,971,538.73 Furniture and Equipment 80,053,047.31 - - Vehicle, Boats & Aircraft 9,435,015.45 - - Other Assets 80,182,749.32 - - Total Depreciable Assets at Historical Costs 1,490,098,370.29$ -$ 175,502,737.49$

Less Accumulated Depreciation for: Buildings and Improvements (469,355,810.11)$ -$ -$ Infrastructure (36,492,800.52) - - Facilities & Other Improvements (60,611,536.77) - - Furniture and Equipment (55,805,422.67) - - Vehicles, Boats & Aircraft (5,221,378.59) - - Other Assets (28,434,124.85) - - Total Accumulated Depreciation (655,921,073.51)$ -$ -$ Depreciable Assets, Net 834,177,296.78$ -$ 175,502,737.49$

Amortizable Assets - Intangible: Computer Software 29,143,973.15$ -$ -$ Total Amortizable Assets - Intangible 29,143,973.15$ -$ -$

Less Accumulated Amortization for: Computer Software (28,827,119.21)$ -$ -$ Total Accumulated Amortization (28,827,119.21)$ -$ -$ Amortizable Assets - Intangible, Net 316,853.94$ -$ -$

Capital Assets, Net 1,034,459,431.25$ -$ -$



Interagency BalanceTransfers In Transfers Out Additions Deletions 8/31/2019

-$ -$ 2,114,289.13$ -$ 52,508,014.87$ - - 95,203,755.12 - 60,268,628.64 - - 496,540.02 - 9,500,483.80 -$ -$ 97,814,584.27$ -$ 122,277,127.31$

-$ -$ -$ (1,188,648.00)$ 1,241,374,578.88$ - - - - 81,264,818.95 - - - - 172,102,249.87

10,772.18 - 5,657,426.77 (4,003,356.15) 81,717,890.11 - - 1,290,356.63 (175,845.29) 10,549,526.79 - 6,776,964.56 (484,908.20) 86,474,805.68

10,772.18$ -$ 13,724,747.96$ (5,852,757.64)$ 1,673,483,870.28$

-$ -$ (38,287,683.91)$ 1,129,215.60$ (506,514,278.42)$ - - (2,426,472.29) - (38,919,272.81) - - (7,309,800.36) - (67,921,337.13)

(10,772.18) (6,728,381.73) 3,842,829.46 (58,701,747.12) - - (848,642.23) 175,453.73 (5,894,567.09) - - (5,370,408.83) 325,647.50 (33,478,886.18)

(10,772.18)$ -$ (60,971,389.35)$ 5,473,146.29$ (711,430,088.75)$ -$ -$ (47,246,641.39)$ (379,611.35)$ 962,053,781.53$

-$ -$ -$ (430,769.24)$ 28,713,203.91$ -$ -$ -$ (430,769.24)$ 28,713,203.91$

-$ -$ (140,389.10)$ 430,769.24$ (28,536,739.07)$ -$ -$ (140,389.10)$ 430,769.24$ (28,536,739.07)$ -$ -$ (140,389.10)$ -$ 176,464.84$

-$ -$ 50,427,553.78$ (379,611.35)$ 1,084,507,373.68$





NOTE 3: Deposits, Investments, and Repurchase Agreements Deposits As of August 31, 2020 and 2019, the carrying amount of deposits was $7,394,584.33 and $2,963,275.91, respectively, as presented below:

2020 2019

Cash in Bank - Carrying Value $ 7,394,584.33 $ 2,963,275.91 Less: Certificates of Deposit included in carrying value and reported as

Cash Equivalent - - Less: Uninvested Securities Lending Cash Collateral included in carrying

value and reported as Securities Lending Collateral - - Less: Securities Lending CD Collateral included in carrying value and

reported as Securities Lending Collateral - - Cash in Bank per AFR $ 7,394,584.33 $ 2,963,275.91

Current Assets Cash in Bank $ 7,389,910.62 $ 2,958,250.49 Current Assets Restricted Cash in Bank* 4,673.71 5,025.42 Cash in Bank per AFR $ 7,394,584.33 $ 2,963,275.91

* Includes proprietary and fiduciary Cash in Bank. As of August 31, 2020 and 2019, the total bank balances were $10,466,823.36 and $10,974,039.66, respectively. Investments Texas State is authorized to invest Operating and Endowment Funds as a prudent person in obligations and instruments as defined in the Texas State University System Investment Policy. TexPool Investments at Amortized Cost Investments in TexPool Prime money market funds that maintain a stable $1.00 share price are reported at amortized cost. TexPool Prime has a very conservative investment policy and aligns with Rule 2a-7 money-market practices. TexPool Prime invests conservatively in US Government Securities, repurchase agreements, AAA rated money market mutual funds, commercial paper, and certificates of deposit to provide a safe, efficient, and liquid investment option. The fund is rated AAAm by Standard & Poor’s, the highest rating a local government investment pool can achieve. There is no penalty or limit for withdrawal, however, a courtesy one-day notification is requested for withdrawals exceeding approximately $20 million. TexPool Prime is one of two portfolios developed on behalf of Texas entities to provide for the creation of investment pools for public funds and to allow eligible governmental entities to jointly invest their funds in authorized investments. The TexPool Prime portfolio was created to allow for an investment alternative that incorporates into its investment framework commercial paper and certificates of deposit, as well as U.S. Treasury and U.S. government agency securities. TexPool Prime commenced operations on December 27, 2002. The Texas Treasury Safekeeping Trust Company, under the guidance of the Texas Comptroller of Public Accounts, administers the TexPool portfolios as public fund investment pools. Fair Value of Investments Texas State measures and records investments using fair value measurement guidelines in accordance with GASB Statement 72, Fair Value Measurement and Application. GASB 72 recognizes a three-level fair value hierarchy for inputs to valuation techniques:

Level 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; or,

Level 3: Unobservable inputs. Net Asset Value: Net Asset Value Per Share (NAVPS) method is used when there is no readily determinable fair value.




As of August 31, 2020, the valuation of investments were:

Fair Value Hierarchy

Level 1 Inputs

Level 2 Inputs

Level 3 Inputs

Net Asset Value

2020 Value

Fair Value U.S. Government:

U.S. Treasury Securities $ 50,173.10 $ 4,044,026.06 $ - $ - $ 4,094,199.16 U.S. Government Agency Obligations

(Ginnie Mae, Fannie Mae, Freddie Mac, etc.)

- 4,962,293.26 - - 4,962,293.26

Corporate Obligations - 21,564,521.58 - - 21,564,521.58 Corporate Asset and Mortgage Backed

Securities - 9,574,444.53 - - 9,574,444.53

Equity 98,031,030.02 - 5,832,696.78 - 103,863,726.80 Equity-Preferred Securities 100,534.00 100,534.00 International Equity 15,753,610.94 - - - 15,753,610.94 Fixed Income Money Market and Bond

Mutual Fund 121,560,086.14 - - - 121,560,086.14

Other Commingled Funds 269,578.19 - - - 269,578.19

Long-Term Investments $ 235,765,012.39 $ 40,145,285.43 $5,832,696.78 - $ 281,742,994.60 Amortized Cost Other Commingled Funds (TexPool) $ 313,757,652.03 Cash Equivalents $ 313,757,652.03

As of August 31, 2019, the valuation of investments were:

Fair Value Hierarchy

Level 1 Inputs

Level 2 Inputs

Level 3 Inputs

Net Asset Value

2019 Value

Fair Value U.S. Government: U.S. Treasury Securities $ - $ 7,671,214.39 $ - $ - $ 7,671,214.39 U.S. Government Agency Obligations

(Ginnie Mae, Fannie Mae, Freddie Mac, etc.) - 4,923,244.54 - - 4,923,244.54

Corporate Obligations - 18,047,645.02 - - 18,047,645.02 Corporate Asset and Mortgage Backed

Securities - 9,611,492.55 - - 9,611,492.55 Equity 82,502,659.17 - 758,564.00 - 83,261,223.17 Equity-Preferred Securities 3,235.00 3,235.00 International Equity 14,745,939.70 - - - 14,745,939.70 Fixed Income Money Market and Bond

Mutual Fund

177,903,974.65 - - - 177,903,974.65 Other Commingled Funds 290,916.32 - - - 290,916.32 Long-Term Investments $ 275,446,724.84 $ 40,253,596.50 $ 758,564.00 - $ 316,458,885.34 Amortized Cost Other Commingled Funds (TexPool) $ 231,320,306.98 Cash Equivalents $ 231,320,306.98

Deposit and Investment Risk Factors The following paragraphs describe various types of risk related to Deposits and Investments. Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty, the university will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The university’s





investment policy limits holding of securities by counterparties to those involved with securities lending. As of August 31, 2020, Texas State University had no investments subject to custodial credit risk. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The TSUS investment policy requires that investments in debt securities have credit ratings recognized by the agencies of Standard and Poor's, Finch, and/or Moody's. For operating, a short-intermediate term funds portfolio, average credit quality of the entire portfolio is to be greater than or equal to A-, as defined by S&P (A- by Finch, A3 for Moody's). The minimum credit quality of any diversified fund vehicle must be investment grade at the time of purchase. Operating Long-Term funds portfolios are intended to be invested in a similar manner to Endowment funds, but no more than 20% of the global fixed income and credit may be rated below investment grade, and no more than 15% of the total Long-Term Operating Portfolio may be invested in emerging/frontier markets, a sub-set of international. An Operating Long-Term funds portfolio may only invest up to 50% of the market value of its total operating funds portfolio, exclusive of bond proceeds, in this type of investment strategy. In order to invest with managers who utilize alternative investments, Texas State must retain an investment consultant. For the endowment portfolio, risk is controlled through the portfolio diversification of market sector and maturity. Risk is further defined by prohibited investments and activities, and limited by maximum single purchase and maximum aggregate position percentages. As of August 31, 2020 and 2019, the credit quality distributions for securities with credit risk exposures were as follows:

Current Standard & Poor's Rating

Fund Type

GAAP Fund Investment Type

Rating 2020 2019

05 9999 U.S. Government Agency Obligations (Ginnie Mae, Fannie Mae, Freddie Mac, etc.)

AAA $ 4,962,293.26 $ 4,923,244.54

05 9999 Corporate Obligations AA 64,737.95 -

A 3,685,055.60 4,039,617.73 BBB 15,853,772.06 11,847,662.11

BB 281,683.40 186,720.52 NR - 50,640.00

05 9999 Corporate Asset and Mortgage Backed Securities AAA 2,311,255.34 5,654,829.67 AA 74,179.88 564,473.25 A 258,680.76 - NR 6,930,328.55 8,315,434.17

05 9999 Municipal Bonds AA 68,319.45 - A 253,528.40 - BBB 80,753.60 -

05 9999 Miscellaneous - Preferred Securities BBB 60,894.00 3,235.00

BB 39,640.00 -

05 9999 International Obligations AA 153,885.99 130,148.20 A 349,843.43 669,143.84 BBB 713,385.45 1,075,808.92 BB 59,556.25 47,903.70 Total $ 36,201,793.37 $ 37,508,861.65

Concentration of Credit Risk Concentration of credit risk is the risk of loss attributable to the magnitude of investment in a single issuer. Investments issued or explicitly guaranteed by the U.S. Government, and investments in mutual funds, external investment pools, and other pooled investments are excluded from this disclosure requirement. Texas State University, by following the TSUS Investment Policy, limits the Operating Short-Intermediate fund for mutual funds, commingled vehicles, and registered Exchange Traded Funds (ETFs) portfolio holdings be no more than 10% of the total assets of a single fund, commingled vehicle or ETF. For Operating Short-Intermediate and Operating Long fund combined excluding pooled vehicles, mutual funds, ETFs or Managed Accounts which are multi-strategy and multi-manager products, no more than 40% of the portfolio may be invested in a single mutual fund or manager. As of August 31, 2020, Texas State University was not subject to concentration of credit risk.




Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Usually, a longer maturity results in a greater degree of price volatility. The university minimizes interest rate risk on investments by managing maturities to cash flow. Interest rate risk is reduced by investing in fixed income securities with varying maturities. The weighted average maturity of the entire short-intermediate term funds portfolio is to be less than or equal to 36 months. There is no maximum maturity of any single issue. Operating Long funds are intended to be invested in a similar manner to endowment funds. The long term objective of the Endowment portfolio is to preserve the intergenerational equity of the endowment while providing for appropriate current spending. All operating long and endowment funds are managed by the “prudent person standard”. Although all long-term investments are subject to some interest rate risk due to various economic forces, as of August 31, 2020, Texas State University had limited the exposure to interest rate risk through asset allocation. Global fixed income/credit is intended to offset the volatility of equities, particularly during market downturns, as well as provide deflation protection. Residential and Commercial Mortgage Backed securities (RMBS & CMBS) and Asset Backed securities (ABS) can be highly sensitive to interest rate changes, if the changes are severe enough, over a given time period. However, CMBS and ABS securities tend to be less so than RMBS securities due primarily to the nature of the collateral. Because all three sectors generate cash flows from interest and principal payments on underlying residential and commercial mortgage pools (RMBS & CMBS) as well as on outstanding credit card and auto receivables (ABS), they can be sensitive to prepayments in periods of declining interest rates and vice versa in periods of rising interest rates. Market values and durations of the university’s investments at August 31, 2020 and 2019, were:

2020 2019

Investment Type Fair Value Average Maturity Fair Value

Average Maturity

U.S. Government Agency Obligations $ 4,094,199.16 0.48 $ 7,671,214.39 5.8 Corporate Obligations 19,885,249.01 1.53 16,124,640.36 3.6 Corporate Asset and Mortgage Backed

Securities 14,536,737.79 0.78 14,534,737.09 2.7 Municipal Bonds 402,601.45 0.15 0.00 0.0 Miscellaneous-Preferred Securities 100,534.00 0.04 3,235.00 1.9 International Obligations 1,276,671.12 0.14 1,923,004.66 3.7 Total $ 40,295,992.53 3.12 $ 40,256,831.50 3.71

Reverse Repurchase, Securities Lending and Derivative Investing The university did not participate in Reverse Repurchase Agreements, Securities Lending, or Derivative Investing during fiscal year 2020. NOTE 4: Long-Term Liabilities Employees’ Compensable Leave Accrued compensable leave is the Institution's liability for unpaid overtime accrued by classified employees and unused vacation time for all employees. Obligations to personnel are paid at the time of dismissal, resignation, or separation from the university, provided the employee has at least six months of continuous employment with the state. An expense and liability are recorded annually as the benefits accrue to employees. For the fiscal years ended August 31, 2020 and 2019 the accrued liability for vacation and overtime totaled $13,637,467.19 and $12,594,665.29, respectively. During the same periods, the university made lump sum payments totaling $1,972,749.54 and $1,439,259.80 for accrued vacation and overtime to employees who separated from state service. Sick leave, the accumulation of which is unlimited, is earned at the rate of eight hours per month and paid only when an employee is off due to illness or to the estate of an employee in the event of his/her death. The maximum leave that may be paid to an employees' estate is the lesser of (a) one-half of the employees' accumulated entitlement or (b) 336 hours.





The following changes occurred in long-term liabilities during the fiscal years ended August 31, 2020 and 2019:

Employees' Compensable Leave 2020 2019 Balance, September 1 $ 12,594,665.29 $ 12,433,771.86 Additions 3,015,551.44 1,600,153.23 Reductions (1,972,749.54) (1,439,259.80) Balance, August 31 $ 13,637,467.19 $ 12,594,665.29

Amounts Due Within One Year $ 8,078,392.53 $ 7,626,579.19 Amounts Due Thereafter 5,559,074.66 4,968,086.10 Total Due $ 13,637,467.19 $ 12,594,665.29

NOTE 5: Bonded Indebtedness All bonded indebtedness for Texas State University is issued by System Administration through the Texas State University System Revenue Financing System. System Administration and each component institution within the system are members of the Revenue Financing System. The Board of Regents pledged all of the funds (revenues) and balances derived or attributable to any member of the Revenue Financing System that is lawfully available to the Board for payments on Parity Debt. System Administration issued the debt; therefore, the bonds payable attributable to the institution are included with the Bonds Payable reported by System Administration. The Institution must repay the debt that was issued on its behalf; consequently, the following debt amortization schedule is presented for informational purposes only.

Debt Service Requirements Year Principal Interest Total 2021 36,515,333.52 23,761,767.65 60,414,064.62 2022 37,705,000.00 22,306,992.76 60,011,992.76 2023 36,450,000.00 20,743,385.82 57,193,385.82 2024 36,890,000.00 19,195,783.62 56,085,783.62 2025 38,435,000.00 17,644,190.86 56,079,190.86

2026-2030 187,020,000.00 63,064,397.68 250,084,397.68 2031-2035 121,565,000.00 28,044,888.48 149,609,888.48 2036-2040 52,460,000.00 8,199,507.86 60,659,507.86 2041-2045 16,085,000.00 1,760,964.90 17,845,964.90

Totals $ 563,125,333.52 $ 204,721,879.63 $ 767,984,176.60 A portion of the debt represents Tuition Revenue Bonds historically funded by the Texas Legislature through General Revenue Appropriations. For fiscal years ended August 31, 2020 and 2019, the institution was appropriated $17,369,676 and $17,387,991, respectively, for Tuition Revenue Bond debt service. The institution expects future Legislative appropriations to meet debt service requirements for Tuition Revenue Bonds.




NOTE 6: Leases Operating Leases Texas State has entered into various operating leases for buildings, land, and vehicles. Rental expenses for operating leases for the fiscal years ended August 31, 2020 and 2019 were $364,798.11 and $353,725.51, respectively. Future minimum lease rental payments under non-cancelable operating leases having an initial term in excess of one year, as of August 31, 2020 and 2019, were as follows:

Fiscal Year 2020 Fiscal Year 2019

2021 $ 259,650.05 2020 $ 345,169.40 2022 184,943.38 2021 238,608.75 2023 163,393.68 2022 169,747.48 2024 161,485.65 2023 158,849.13 2025 164,122.17 2024 161,485.65

2026 - 2030 293,310.63 2025 - 2029 457,432.80 Total $ 1,226,905.56 Total $ 1,531,293.21

NOTE 7: Pension Plans and Fringe Benefits Paid by the State The state established an optional retirement program (ORP) for institutions of higher education. Participation in the ORP is in lieu of participation in the Teacher Retirement System and is available to certain eligible employees. Employee member and employer contributions were as follows for the fiscal years ended August 31, 2020 and 2019:

Contributions 2020 2019 Member Contributions $ 5,657,072 $ 5,581,233 Employer Contributions 6,042,108 6,002,102 Total $ 11,699,180 $ 11,583,335

For the fiscal year ended August 31, 2020, the state provided on-behalf unemployment contributions of $44,503. Other paid-on-behalf amounts pertain to pension and OPEB contributions and liabilities which are covered by System reporting. NOTE 8: Interfund Activity and Transactions Texas State experienced routine transfers with other state agencies, consistent with the activities of the fund making the transfer and as a result of various grants and contract activities. In addition to transfers, Texas State recorded assets and liabilities for future amounts due from/to other state agencies. Repayment of interagency balances will occur within one year from the date of the financial statements. The university also experiences other interagency activity, which is classified as transfers in/out or legislative transfers in/out. These transfers pertained to the receipt of bond proceeds and debt service payments from/to TSUS. Legislative transfer activity is directly attributable to bonds authorized by the Legislature and historically funded by means of special line items in the university’s General Revenue appropriations.





2020 2019

Agency Name . Agency Number

D23 Fund Transfers In Transfers Out Transfers In Transfers Out

Comptroller – Fiscal-Hazlewood 902 0210 $ 807,416.00 $ - $ 1,600,001.00 $ - Texas State University System for

Bond Proceeds 758 7999

33,000,000.00 - - - Texas State University System for

Debt Service and Billings 758 7999 314,594.65 44,950,954.99 434,932.81 41,965,204.63 Texas Dept of Motor Vehicles for License Plate 608 0802 22,492.72 - - 12,378.94 Total Transfers

$ 34,144,503.37 $ 44,950,954.99 $ 2,034,933.81 $ 41,977,583.57

2020 2019

Agency Name______________ Agency Number

D23 Fund

Due From Other State

__Agencies__

Due to Other State

__Agencies__

Due From Other State

__Agencies__

Due to Other State

__Agencies__.

Federal General Land Office 305 0027 $ 43,334.30 $ - $ - $ 5,634.58 General Land Office 305 0001 12,264.82 - - - Texas Workforce Commission 320 5026 6,822.88 - 12,581.87 - Department of Public Safety 405 3984 - - 556,551.96 - Department of Agriculture 551 5026 746.53 - 1,748.07 - Texas A&M AgriLife Research 556 7999 14,956.56 - - - Texas Division of Emergency

Management 575 0092 780,157.23 - Texas Commission on

Environmental Quality 582 1535 237,769.35 - 384,662.97 - Texas Department of

Transportation 601 0006 33,539.72 - 30,732.90 - Texas Education Agency 701 0148 100,197.91 - - - Texas A&M Engineering

Extension Service 716 7999 18,197.94 109,738.78 108,699.15 2,858.77 Texas Southern University 717 7999 - 3,093.73 - 163.38 University at Texas Austin 721 7999 20,160.86 13,480.14 - - University of Texas El Paso 724 7999 - - 18,282.80 - Texas Tech University 733 7999 33,416.88 - 23,515.81 - University of Texas at San Antonio 743 7999 107,684.35 6,204.60 76,099.45 - University of Texas Health Science

Center at San Antonio 745 7999 67,138.15 4,874.19 65,116.35 5,290.78 Parks and Wildlife Department 802 0931 102,579.17 - - - Parks and Wildlife Department 802 0951 85,556.27 - - - Parks and Wildlife Department 802 4673 - - 395,074.95 64.34

State Governor – Fiscal 300 0421 8,773.26 - 624,857.77 - Health and Human Services 529 0001 181,087.39 - 13,313.01 - Department of State Health

Services 537 0001 179,019.33 - 478,194.40 - Department of State Health

Services 537 5044 477,875.62 - - - Texas Water Development Board 580 7999 38,803.92 - - - University of Texas System 720 7999 - 6,999.37 - 10,594.19 University of Texas – Rio Grande

Valley 746 7999 - 2,756.34 - - Texas Higher Education 781 0001 18,086.33 174,342.44 1,183.29 113,049.14 Parks and Wildlife Department 802 0014 33,557.07 - 96,614.66 - Texas Historical Commission 802 4673 818.01 - - - Total Due From / Due To $ 2,602,543.85 $ 321,489.59 $ 2,887,229.41 $ 137,655.18




2020 2019

Agency Name __ . Agency Number

D23 Fund

Legislative Transfers In

Legislative Transfer Out

Legislative Transfers In

Legislative Transfers Out

Texas Veterans Commission for Reimbursement TVC 902 0001 $ 1,389,375.00 $ - $ 1,386,066.00 $ -

Texas State University System for Debt Service 758 0001 - 22,452,402.24

- 23,238,455.42

Total Legislative Transfers $ 1,389,375.00 $ 22,452,402.24 $ 1,386,066.00 $ 23,238,445.42

NOTE 9: Contingencies and Commitments As of August 31, 2020 and 2019, various lawsuits and claims involving Texas State were pending. While the ultimate liability with respect to litigation and other claims asserted against the university cannot be reasonably estimated at this time, such liability, to the extent not provided for by insurance or otherwise, is not likely to have a material effect on the university. NOTE 10: Risk Management WORKERS’ COMPENSATION The state’s Workers’ Compensation program is administered by the State Office of Risk Management (SORM). As a participating agency, Texas State is assessed an annual charge for Workers’ Compensation coverage for employees according to a set formula. The assessment for all fund sources was $585,041.50 for the fiscal year ended August 31, 2020 and $513,099.54 for the fiscal year ended August 31, 2019. UNEMPLOYMENT COMPENSATION The state provides an Unemployment Compensation program; actual claims are paid from several funding sources as determined by the Comptroller of Public Accounts. The Unemployment Compensation program is on a pay-as-you-go basis, in which no assets are set aside to be accumulated for the payment of claims. The assessment for all fund sources for the fiscal year ended August 31, 2020 was $571,407.86. PROPERTY AND OTHER INSURANCE COVERAGE Property insurance is obtained through Arthur J. Gallagher Risk Management Services, Inc (Gallagher) to include fire and flood coverage for all university buildings valued in excess of $100,000. Texas State’s other property, vehicle, and special events insurance policies are also obtained through Gallagher, which is a participant in the SORM’s statewide insurance program. VEHICLE INSURANCE The Texas Motor Vehicle Safety Responsibility Act (Texas Transportation Code, Chapter 601) requires that every non-governmental vehicle operated on a state highway be insured for minimum limits of liability in the amount of $30,000/$60,000 (bodily injury) and $25,000 (property damage). There is coverage of $1,000,000 combined single liability. The coverage exceeds the extent of the waivers of state immunity in the Tort Claims Act. Auto insurance is obtained through Gallagher to include liability coverage for all university-owned vehicles as well as hired and non-owned vehicles. Liability coverage is subject to a $5,000 deductible. Vehicles rented or leased have additional comprehensive and collision coverage subject to a $1,000 deductible. FOREIGN TRAVEL INSURANCE Foreign travel accident and sickness as well as liability coverage is obtained through Gallagher. This policy covers all students, faculty, and staff of the university that travel abroad for approved university business or instruction. The coverage offers out-of- country medical benefits of $200,000, emergency medical of $10,000, accidental death and dismemberment, emergency medical evacuation, emergency reunion, security evacuation, chaperone replacement, and war risk. The policy provides general liability coverage of $1,000,000/$2,000,000 and auto liability of $1,000,000 single limit BI/PD and one accident.





OTHER Texas State University is exposed to a variety of civil claims resulting from the performance of its duties. It is the university’s policy to periodically assess the proper combination of commercial insurance and retention of risk to cover losses to which it may be exposed. Liabilities are reported when it is both probable a loss has occurred, and the amount of that loss can be reasonably estimated. There were no liabilities outstanding as of August 31, 2020 and 2019.

Claims and Judgments 2020 2019 Balance, September 1 $ - $ - Increases 4,367,879.68 1,147,984.14 Decreases (4,367,879.68) (1,147,984.14) Balance, August 31 $ - $ -

NOTE 11: The Financial Reporting Entity Component Units are legally separate organizations for which the elected officials of the primary government are financially accountable. In addition, Component Units can be other organizations for which the nature and significance of their relationship with the primary government is such that exclusion would create misleading or incomplete financial statements. COMPONENT UNITS The Texas State University Research Foundation (Research Foundation) was formed as an independent 501(c)(3) organization on July 22, 2010. The Research Foundation was formed to support the university’s mission and objectives of promoting higher education, conducting research, providing public service, and assisting in economic development in Texas. The Research Foundation is exclusively associated with the university and its fiscal year end concludes on the final day of February. The Research Foundation is included in Texas State’s financial statements as a blended component unit in accordance with GASB Statement 14 as amended by GASB Statement 39. Texas State’s key business officers comprise the entirety of the Research Foundation’s officers and directors, thereby enabling Texas State to impose its will on the Research Foundation. During the fiscal years ended February 28, 2020 and February 29, 2019, the Research Foundation incurred expenses in the amount of $44,830.72 and $38,277.10, respectively. Separate financial statements may be obtained by contacting Texas State University, Director of Accounting, General Accounting Office, 601 University Drive, JCK 589, San Marcos, TX 78666-4684. The Harold M. Freeman Education Foundation (Freeman Foundation) is a legally separate entity formed through a trust to make the use of Freeman Ranch available exclusively to Texas State. The Freeman Center is used and operated solely for farm, ranch and game management, education, and research purposes in connection with the educational activities of Texas State. There is no formal governing board for the Freeman Foundation. Texas State acts as an active co-trustee to operate the Center. Frost Bank operates as an inactive trustee to ensure the provisions of the trust are followed. Based on the Freeman Foundation’s close relation to Texas State, it is included as a blended component unit. Separate financial statements are not issued by the Freeman Foundation. Information about the Freeman Foundation may be obtained by contacting Texas State University, Director of Accounting, General Accounting Office, 601 University Drive, JCK 589, San Marcos, TX 78666-4684.




Condensed Financial Information for Blended Component Units Research

Foundation Freeman

Foundation Condensed Statement of Net Position

Assets Current Assets $ 741.00 $ 18,680.71 Capital Assets, Net 138,364.01 Total Assets 741.00 157,044.72 Liabilities Current Liabilities 1.00 0.00 Total Liabilities 1.00 0.00 Net Position Capital Assets, Net of Related Debt 138,364.01 Restricted, Expendable 18,680.71 Unrestricted 740.00 Total Net Position $ 740.00 $ 157,044.72 Condensed Statement of Revenues, Expenses and Changes in Net Position Operating Revenues $ 44,830.72 $ 83,393.96 Depreciation Expense 41,339.20 Operating Expenses 44,830.72 296,083.98 Operating Income/(Loss) 0.00 (254,029.22) Non-Operating Revenues 4,544.52 Transfers In 208,178.31 Change in Net Position 0.00 (41,306.39) Net Position, Beginning 740.00 198,351.11 Net Position, Ending $ 740.00 $ 157,044.72

Condensed Statement of Cash Flows Net Cash Provided (Used) by: Operating Activities $ 0.00 $ (212,690.02) Non-Capital Financing Activities 208,178.31 Capital and Related Financing Activities 0.00 Investing Activities 4,544.52 Beginning Cash Equivalents 741.00 18,647.90 Ending Cash Equivalents $ 741.00 $ 18,680.71





RELATED ORGANIZATIONS The following affiliated foundations, while not component units, are disclosed due to their close relationships with the university. Affiliated foundations are controlled by separate boards of directors, pay their own expenses, and are not included in the basic financial statements of the university as the primary government. Instead, information about their financial activities is shown below. The Texas State University Development Foundation (Development Foundation) was formed in 1977 to support the educational, scientific, and research mission of Texas State. The Development Foundation raises and manages endowment funds designated for scholarships and other support for the university. Financial activity of the Development Foundation as of and for the years ended June 30, 2020 and 2019 was as follows:

2020 2019 University Support $ 2,492,259.15 $ 1,688,522.32 Student Scholarships $ 2,136,220.50 $ 1,949,717.76 Restricted Gifts $ 2,955,723.90 $ 3,532,949.15 Temporarily Restricted Gifts $ 2,122,390.16 $ 2,995,146.17

The McCoy College of Business Foundation (Foundation) is a 501(c)(3), founded in 2004, dedicated exclusively to the support of the McCoy College of Business Administration (McCoy) at Texas State. The Foundation’s Board of Directors manages its investments and determines McCoy’s annual funding to support chairs, professorships, undergraduate scholarships, and graduate fellowships, as well as the development of faculty, programs, and students. Based upon estimated, unaudited figures for the fiscal years ended August 31, 2020 and 2019, the Foundation financial activity was as follows:

2020 2019 Distributions to the University $ 1,059,600.00 $ 1,027,250.00 New Contributions to Endowments $ 1,944,234.00 $ 1,983,681.64 Assets $ 50,727,851.00 $ 45,599,260.97 Liabilities $ 0.00 $ 35,525.28

The Foundation pays its own operating expenses, including its share staff salaries, accounting, supplies, and auditing, which were estimated at approximately 0.4% of the assets of the Foundation for the years ended August 31, 2020 and 2019, respectively. Fees for investment management were approximately 1% of the assets each year. The Texas State Alumni Association’s (Association) efforts and funds are dedicated to the university, and are used to provide student scholarships, campus support, and alumni outreach or engagement activities. Financial activity as of and for the years ended August 31, 2020 and 2019 was as follows:

2020 2019 Student Scholarships $ 74,700.00 $ 159,300.00 Deposits Held in Trust at the University $ 151,976.00 $ 142,515.38

Deposits held in trust at the university are considered Custodial Funds in the university’s financial statements. NOTE 12: Stewardship, Compliance, and Accountability Texas State’s administration is not aware of any non-compliance items or material violations of finance-related legal and contract provisions. Per the laws of the State of Texas, Texas State cannot spend amounts in excess of appropriations granted by the Texas Legislature and there are no deficits reported in net position. NOTE 13: Donor Restricted Endowments Net appreciation classified as restricted, expendable on the Statement of Net Position is as follows:

2020 2019 $ 22,835,664.06 $ 21,403,604.08




For fiscal year 2020 there was an increase in fair value totaling $1,309,021.69 as opposed to the decrease in fair value of ($7,141,299.08) for 2019. The amount reported as net appreciation represents net appreciation on investments of donor restricted endowments available for authorization for expenditure. Pursuant to the Uniform Prudent Management of Institutional Funds Act (Property Code Chapter 163.001), net appreciation (realized and unrealized) in the fair market value of the endowment assets in excess of historical dollar value of the gifts may be distributed to the extent prudent. Distributions are calculated using a 60-month FMV rolling average times a 3% distribution. The individual endowments own units in a restricted investment pool and the annual distribution is allocated on a per unit basis. Changes from prior year balances for expendable and non-expendable balances were as follows:

True Endowment Funds 2020 2019 Reason for Change Expendable Balances

$1,432,060

($1,995,902)

Fair value fluctuations, earnings, fees and distributions.

Non-Expendable Balances $320,745 $645,937 New gifts

NOTE 14: Termination Benefits In response to budgetary concerns related to the Coronavirus (COVID 19) pandemic in Spring 2020, university management offered a voluntary retirement incentive program to reduce long-term costs. One hundred and one people elected to take advantage of the program and retired for an incentive cost to the university of $3,677,797. The expense is accrued in fiscal year 2020 and was paid out on September 1, 2020. NOTE 15: Restatement of Net Position During the fiscal year ended August 31, 2020, the University implemented GASB Statement 84 Fiduciary Activities, which establishes criteria for identifying and reporting fiduciary activities in a new fund type named Custodial Funds. The implementation of this statement has resulted in changes to the presentation of the financial statements. Those changes include removal of the fiduciary assets and liabilities from the enterprise fund Statement of Net Position and presenting them in a separate Statement of Fiduciary Net Position and the addition of a new Statement of Changes in Fiduciary Net Position. As required by GASB Statement 84 Fiduciary Activities, the financial statements for the year ended August 31, 2019 have been restated for comparative purposes. In the previously issued August 31, 2019 enterprise fund financial statements, $2,302,788 was included as cash and as a liability. For the restatement it is now reflected as cash and net position in the Statement of Fiduciary Net Position. The fiscal year 2019 beginning balance of cash of $2,464,364.58 has been restated out of the enterprise fund’s Cash and Cash Equivalents in the Statement of Cash Flows, and the beginning Net Position for the Statement of Changes in Fiduciary Net Position has been restated for the same amount.



Texas State University is an Equal Employment Opportunity/Affirmative Action Employer, committed to inclusive thought and action in support of our diverse community. Individuals from historically underrepresented groups and all those who share our commitment to inclusivity and passion for the strength of our diversity are strongly encouraged to apply.


2010-2019 TEN YEARS AT TEXAS STATE:

A DECADE OF SUCCESS.

21-028 12-20

Development of

20new buildings.

58 new majors, minors, and certificate programs launched.

76,540 bachelor’s, master’s,

and doctoral degrees awarded.

More than

$1.1BILLION

in grants andscholarships distributed.

200,000alumni surpassed.

$233 MILLIONraised in support of the university,

students, and faculty.

annual financial report - texas state university

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